Breaking news: China has rejected arbitration under Annex VII of the UN Convention on the Law of the Sea with the Philippines, dealing a heavy blow to the future of dispute settlement under UNCLOS (h/t China Law Prof Blog). According to this China Daily report,

“Chinese Ambassador to the Philippines Ma Keqing had an appointment with officials from the Philippines’ Foreign Ministry on Tuesday and returned a note and related notice after expressing China’s rejection,” spokesman Hong Lei said at a daily press briefing.

“The note and related notice not only violate the consensus enshrined in the Declaration on the Conduct of Parties in the South China Sea (DOC), but are also factually flawed and contain false accusations,” Hong said.

As I have noted here (and as Prof. Clarke notes as well), the Philippines is now within its rights to ask the President of the International Tribunal for the Law of the Sea to appoint all four remaining arbitrators for the Annex VII tribunal. Once the President of ITLOS has done so, the duly constituted arbitral tribunal may act even without China’s participation.

Upon reflection, I am not really surprised China has decided to walk away from the Annex VII tribunal. As I noted earlier, such tribunals have tended to combine their considerations of jurisdiction with those of the merits. They have not generally bifurcated their proceedings, nor do they seem to have any obligation to do so.

This is a problem for China because while their jurisdictional challenge is pretty strong, their argument on the merits is undeveloped and fuzzy. They have never exactly spelled out what they mean by having “indisputable sovereignty” over the South China Sea. Do they mean it is a territorial sea? Or that they have general economic rights similar to an Exclusive Economic Zone?

So I am not shocked that China is walking away here. The question for the Philipppines is: what next? Do they continue with the Annex VII arbitration without China? Well, their DFA seems ready to move forward without China. But would any award issued by this tribunal be pretty meaningless?

I’m not sure. I think that any award there would have little impact on China, but it should be useful in helping rally allies in Southeast Asia, especially within ASEAN. It is not going to stop China much, but an award that undermines the legality of China’s claims is certainly better to have than not to have. But it is not nearly as much as it would have been if China had played ball (and lost).

China’s statement contains a curious and hard to understand argument. According to the Chinese foreign ministry, the Philippines arbitration claim “complicates” resolution of conflicts in the South China Sea in violation of the Declaration on Parties’ Conduct in the South China Sea. Presumably, China is referring to Article 5 of the Declaration:

5. The Parties undertake to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner.

Does making an arbitration claim under Annex VII “complicate or escalate disputes”? Given the whole context of Paragraph 5, I am highly doubtful of this argument. One must also note that the previous paragraph instructs all parties to

undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea;

The explicit reference to UNCLOS (albeit the 1982 version) doesn’t really add much weight to the claim that the the Declaration somehow prohibits parties from resorting to UNCLOS arbitration. If anything, it goes the other way. Given that the Declaration is not technically binding under international law anyway, let’s just say this is the weakest of a series of weak arguments trotted out by China in this dispute.

So let’s just call this what it is: China is thumbing its nose at UNCLOS and it has now dealt a serious, near fatal blow, to the UNCLOS dispute settlement system, at least in its ability to resolve serious disputes involving major powers. UNCLOS arbitration is not going to restrain China in any significant way. At least, China doesn’t think it will pay any serious costs to walking away, which is why it is willing to accept the equivalent of a default judgment.

From the perspective of the United States, the China-Philippines episode is a cautionary tale. On the one hand, it suggests that those critics of UNCLOS worried about the impact of Annex VII arbitration tribunals need not fear them all that much. On the other hand, this episode should put an end to the always silly argument that the US needed to join UNCLOS in order to use UNCLOS against China. That was never really going to work, and we now have ample evidence.

This article from the Global Times, a hawkish state-controlled newspaper in China, probably reflects a little bit of the official Chinese view on the Philippines UNCLOS claim. It also contains this troubling bit of analysis, from a Chinese scholar:

The international court would not take the case without agreements from all parties involved, Dong Manyuan, a researcher at the China Institute of International Studies, told the Global Times.

Uh, yes, that’s true in a general sense. But China has already agreed to allow an Article 287 arbitral tribunal to take this case and at least to determine jurisdiction. Article 288(4) would seem to be the last word on this point.

4. In the event of a dispute as to whether a court or tribunal has jurisdiction, the matter shall be settled by decision of that court or tribunal.

Sorry, Global Times! China is stuck with this case, at least as a legal matter, and at least through the jurisdictional phase. I hope the Chinese government is getting better legal advice than this. China could boycott the arbitration, but they would be in a clear violation of Article 287 and Article 288 of UNCLOS. Will it dare to do so?

[Craig H. Allen is the Judson Falknor Professor of Law at the University of Washington in Seattle.]

On December 15, 2012, one phase of the dispute between the Argentine Republic and the Republic of Ghana over the “seizure” of the Argentine frigate ARA Libertad while in a Ghanaian port came to an end, when the International Tribunal for the Law of the Sea (ITLOS) in Hamburg, Germany ordered Ghana to “forthwith and unconditionally release the frigate ARA Libertad” and to “ensure that the frigate ARA Libertad, its Commander and crew are able to leave the port of Tema and the maritime areas under the jurisdiction of Ghana, and … that the frigate ARA Libertad is resupplied to that end.” (See Order of 15 December 2012).

The order came just one month after Argentina filed its application for provisional measures with the ITLOS. The tribunal’s decision—which should receive a warm welcome in the Pentagon—sends a clear message on the principle of sovereign immunity of warships and the readiness of ITLOS to enforce that immunity even when the warship is in the port or internal waters of another state—at least if the involved states are party to the 1982 LOS Convention.

The dispute between the two states has its roots in Argentina’s 2001 default on roughly $100 billion in sovereign debt, reportedly the largest sovereign default in history. NML Capital Investments, which owns some $1billion in Argentina’s sovereign debt, obtained judgment in a New York federal district court for $284 million in 2006. The U.K. Supreme Court later upheld NML’s right to execute its judgment against Argentina’s assets in the U.K. (NML Capital Ltd v Republic of Argentina, [2010] EWCA Civ. 41, aff’d, [2011] UKSC 33), a decision extensively relied on by agents for Ghana during oral argument at the ITLOS.

Not exactly, especially since the “blockade”, is based on Argentina’s claim to sovereignty over the Falkland Islands. Still, depending on where the vessels were “boarded”, (e.g. in the alleged EEZ?), there might be some problem here. In any event, something like economic harassment seems to be going on.

Argentine patrol commanders carrying out interceptions near the South American coast told Spanish captains they were in violation of Argentina’s “legal” blockade of sea channels to the Falklands.

The warning has been backed up in a letter to Aetinape, the Spanish fishing vessels association from the Argentine embassy in Madrid warning boats in the area that “Falklands, South Georgia and the South Sandwich Islands and adjoining maritime spaces are an integral part of the Argentine territory.”

Argentina looks like it is going to do a full court press, both diplomatically and otherwise, to pressure the UK into talks on the Falklands’ future. And I think it has a good chance of working.

U.S. opponents of UNCLOS, whom I think have a number of quite sensible points, do need to explain how the U.S. is going to operate effectively in a world where all other major seafaring nations belong to the UNCLOS system. And they have offered decent arguments. Customary international law already guarantees navigational rights. Bilateral treaties, or even unilateral declarations, can establish U.S. sovereignty over its extended continental shelf. But what about deep seabed mining that occurs outside the sovereignty of any nation? Under UNCLOS, a nation must make an application to the Authority for rights to develop such deep seabeds. It appears that China, for instance, has done just that in its aggressive move to develop seabed mining for certain metals and minerals on the Pacific seabed.

China plans an ultradeep dive by a manned submersible beneath the Pacific that would propel it past the U.S. in a race to explore potentially vast mineral resources in the deepest parts of the world’s oceans.

…

The Pacific test site was selected because the state-run China Ocean Mineral Resources Research and Development Association, also known as Comra, signed a contract in 2001 with the International Seabed Authority, a United Nations body that oversees mining in international waters.

The 15-year contract initially allowed Comra to explore 150,000 square kilometers of seabed for polymetallic nodules—small rocks containing metal ore—although the area was reduced to 75,000 square kilometers after eight years.

ISA, which is based in Jamaica, is meeting to discuss, among other things, unprecedented applications from China and Russia to explore a more recently discovered mineral source, called polymetallic sulphides.

Would a U.S.-based company feel comfortable investing in a project for which it could not establish safe legal title? I think, essentially, opponents of UNCLOS will have to concede that U.S. companies in this situation would have to rely on foreign partners located in UNCLOS member-states, to establish title for such projects. This may not be a big deal, but it is one clear advantage of UNCLOS, it seems to me, that may or may not outweigh all the other disadvantages.

Having just returned from Asia, which is awash in disputes over territorial sea rights and exclusive economic zones, the U.S. domestic debate over ratification of the Law of the Sea Convention seems almost quaint. Unlike pretty much every country in East Asia, the U.S. does not have any serious boundary or other kind of dispute that is likely to be swept up into the Law of the Sea Convention (OK, there is that whole Northwest Passage thing with Canada, but it’s Canada!). So the domestic battle does seem a bit strange, given that the U.S. has relatively less at stake than many other countries that have submitted themselves to UNCLOS.

There is also a depressingly predictable debate about UNCLOS every time ratification is considered by the Senate. International law experts insist that it is absolutely crucial and necessary that the U.S. join, if for no other reason than that every other major nation in the world has joined. And critics insist that it is a horrible treaty that will subordinate the U.S. to corrupt and/or unaccountable international organizations.

I am a bit in the middle on this because I happen to think both sides are actually speaking some truth on UNCLOS. It really is amazing that the U.S., with one of the world’s longest continental shelf and the world’s largest sea power is not a member of UNCLOS, which counts 161 states as members including our past and future seapower rivals Russia and China. And because everyone else that matters has joined, it is harder for the U.S. to advance its interests through bilateral deals (see the excellent comments to this post from last year for further explanation of this point).

On the other hand, UNCLOS creates an unwieldy governing authority and structure that will, over time, become unaccountable and no doubt inimical to key U.S. interests (see here for the Goldsmith/Rabkin critique of the treaty’s effect on U.S. counterterrorism policy). Effectively paying a “tax” to the UNCLOS authority for certain drilling is of questionable value. And at least one part of UNCLOS is, in my humble opinion, unconstitutional because it essentially gives supreme and self-executing effect to judgments of the International Tribunal for the Law of the Sea’s Seabed Disputes Chamber (See Annex VI, Art. 39).

So a tough call with good arguments on both sides. But in the U.S. system, a “tie” goes to the treaty opponents, since the two-thirds of the Senate must give its approval. Let me go way out on a limb here and say that in this political environment, there is zero chance that UNCLOS will come anywhere near the 67 votes it will need to pass. President Obama is going to have to wait for his second term (now there’s an unpleasant thought) before UNCLOS gets close to passage.

Here is another persuasive account of why the U.S. is disadvantaged by not joining the UN Convention on the Law of the Sea. The case is fairly simple: There is a lot of oil and natural gas up there, and the U.S. can’t negotiate with other countries to divvy it up until it signs on to UNCLOS.

The 5.5 million-square-mile area north of the Arctic Circle — part of the U.S., Russia, Canada, Denmark (which owns Greenland), Finland, Norway, Iceland and Sweden — contains up to 25 percent of the Earth’s undiscovered oil and gas reserves, according to the U.S. Geological Survey. . . .

But to remove those resources you have to own them, and nations are now scrambling to claim vast new areas of sea bottom. They can do so by proving them to be extensions of their continental shelves. In summer, U.S., Russian, Canadian, and Danish scientists aboard icebreakers conduct studies to support claims submitted to a U.N. commission. In theory, the U.S. could gain an undersea region as big as California.

That’s the good news, but the bad news is that the United States is last in the claims race. The U.N. Commission on the Limits of the Continental Shelf has begun examining claims from Russia and Norway, which could be granted before the U.S. formally joins the process. Although the U.S. is gathering information for a claim, it cannot be submitted — nor can the U.S. have a say in the claims of other nations — until the government signs an international treaty. The agreement under which the apportionment of riches will go forward — the 1982 Law of the Sea Convention – lays out a comprehensive set of rules governing ocean issues, including protection of marine environments. All Arctic nations except the U.S. have signed. “If this were a ball game,” one Coast Guard admiral told me, “the U.S. wouldn’t be on the field or even in the stadium.”

This seems right to me, and is a compelling reason for joining UNCLOS that may overcome objections in the U.S. Senate. Having said that, if the U.S. does not join UNCLOS, it is of course not bound by any of the determinations of the UN Continental Shelf Commission. It would be harder, but in theory the U.S. could simply work out bilateral deals with all of the claimants on delimitations on the continental shelf. Am I missing something? I admit this might be really hard and complicated, but I think it is a viable option if the U.S. doesn’t join UNCLOS. Since passage of UNCLOS is hardly assured, even in the current U.S. Senate, perhaps the U.S. needs a Plan B?

It is ironic that while Russia supports Canada’s claim to the Northwest Passage, the United States opposes it. With the recent disappearance of multi-year ice, the Passage (or Passages, for there are several) gives access to shipping through the Canadian archipelago of 19,000 islands that lie scattered in a huge pyramid from Iqaluit in the east to the Beaufort Sea in the west, with its apex at the northern tip of Ellesmere Island.

It is also ironic that Canada is in the position of making aggressive claims for territorial sovereignty, while the U.S. is all of a sudden the guardian of the international community’s interest in keeping the seas free. And it is ironic that Byers, no sovereigntist, is a sharp critic of Canada’s failure to more aggressively assert its territorial sovereignty.

Two different but interesting views of Australia’s threat to bring Japan to the ICJ over whaling.

Over at The Jurist, Don Rothwell of Australian National University provides some background and legal context for Australia’s lawsuit. As I understand it, Australia could claim that Japan is actually violating Australia’s 200 mile exclusive economic zone (assuming certain Australian Antarctic claims were accepted). But it seems more likely that Australia will try to make a claim under the 1946 International Convention for the Regulation of Whaling. As I’ve suggested, this seems a very tough case to make, and Japan may get the IWC to alter its rules anyway.

Over at the Australian, Greg Sheridan points out that the Japanese government is not taking Australia very seriously on this issue, and sees it as essentially a domestic political matter for Australians. And he goes on:

As well, observers of all stripes are dumbfounded at the Rudd government’s decision to blindside Japan’s Foreign Minister Katsuya Okada just before his visit to Australia. Canberra did this by announcing, on the eve of Okada’s arrival in Australia and without any warning to the Japanese, that it had decided to take Japan to the International Court of Justice over whaling. There is not the slightest chance of this court action succeeding. To insult Okada, the most pro-Australian member of Tokyo’s core leadership, in this manner was extremely foolish.

Emphasis added. I think Sheridan is not far wrong. Unless Australia is going to make the EEZ argument, it doesn’t seem like it has a very strong case. And even if they somehow win, there is very little chance of Japan complying with the ICJ order.

I had almost forgotten about this ongoing dispute between Australia and Japan over whaling, which has been going on for years (and which I first noted on this blog way back in 2005). The Australian Prime Minister warned Japan yesterday that if whaling doesn’t stop by November, Australia will take Japan to court, either the ICJ or the International Tribunal for the Law of the Sea. Australia seems ready to go. It has its evidence lined up and appears to have James Crawford on board to argue its case before either the ITLOS or the ICJ. I wouldn’t hold my breath on a quick decision on this, but it would be an interesting case nonetheless. As far as I know, Japan has never faced a case in the ICJ. I wonder what its reaction would be.

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